Gilts are starting on the back foot....>

GILT SUMMARY: Gilts are starting on the back foot as well, weighed by overnight

selling in US Treasuries and market sentiment turning to a more risk-on feel.

Yield curve is modestly steeper as long-end underperforms despite DMO tapping

its 6-yr Gilt for Stg2.5bln today. 10-yr gilt yield is 3.2bp higher at 1.34% and

2s/10s spread is 1.5bp steeper.

- Markets attention is on the slightly higher than expected China Q4 GDP number

at 6.8% y/y and news that Apple will be moving hundreds of billions of dollars

back to the US and pay E38bln in taxes.

- Closer to home the telegraph has reported that an early Brexit transitional

deal is not a "forgone conclusion" as France tries to drive home its Brexit

advantage according to sources. While overnight RICS house price balance showed

a surprise rise to 8 in December from 0 in November.

- There is some UK Gilt supply though, with the DMO re-opening its 0.75% 2023

Gilt for Stg2.5bln.

- Once again there is a dearth of UK data today so attention will be on comments

from ECB members and US housing starts, Philly Fed survey and jobless claims.